Soft drinks is price elastic and supply is price inelastic

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Suppose that the demand for soft drinks is price elastic and the supply is price inelastic. If the government imposes a sales tax on soft drinks, which of the following will occur?

a) The tax will fall equally on both consumers and producers.

b) The tax will fall more on producers.

c) The tax will fall more on consumers.

d) The percentage increase in the price of soft drinks will be greater than the percent decrease in quantity demanded

e) the percent decrease in total revenue will be greater than the percent decrease in the quantity demanded.

Reference no: EM13696630

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